[Adopted 12-12-2006 by Ord. No. 2006-5]
A realty transfer tax for general revenue purposes is hereby
imposed upon the transfer of real estate or interest in real estate
situated within the Borough of Montgomery, regardless of where the
documents making the transfer are made, executed or delivered, or
where the actual settlements on such transfer took place, as authorized
by Article XI-D, Local Real Estate Transfer Tax, 72 P.S. § 8101-D
et seq.
The following words, when used in regard to the real estate
transfer tax, shall have the meaning ascribed to them in this section.
A partnership, limited partnership, or any other form of
unincorporated enterprise, owned or conducted by two or more persons
other than a private trust or decedent's estate.
A corporation, joint-stock association, business trust or
banking institution which is organized under the laws of this commonwealth,
the United States, or any other state, territory, or foreign country,
or dependency.
The Department of Revenue of this commonwealth.
Any deed, instrument or writing which conveys, transfers, devises, vests, confirms or evidences any transfer or devise of title to real estate, but does not include wills, mortgages, deeds of trust or other instruments of like character given as security for a debt and deeds of release thereof to the debtor, land contracts whereby the legal title does not pass to the grantee until the total consideration specified in the contract has been paid or any cancellation thereof unless the consideration is payable over a period of time exceeding 30 years or instruments which solely grant, vest or confirm a public utility easement. "Document" shall also include a declaration of acquisition required to be presented for recording under § 418-33.
A corporation of which at least 75% of its assets are devoted
to the business of agriculture and at least 75% of each class of stock
of the corporation is continuously owned by members of the same family.
The business of agriculture shall include the leasing to members of
the same family of property which is directly and principally used
for agricultural purposes. The business of agriculture shall not be
deemed to include:
Recreational activities, such as, but not limited to, hunting,
fishing, camping, skiing, show competition or racing;
The raising, breeding or training of game animals or game birds,
fish, cats, dogs or pets or animals intended for the use in sporting
or recreational activities;
Fur farming;
Stockyard and slaughterhouse operations; or
Manufacturing or processing operations of any kind.
A partnership of which at least 75% of its assets are devoted
to the business of agriculture and at least 75% of the interests in
the partnership are continuously owned by members of the same family.
The business of agriculture shall include the leasing to members of
the same family of property which is directly and principally used
for agricultural purposes. The business of agriculture shall not be
deemed to include:
Recreational activities, such as, but not limited to, hunting,
fishing, camping, skiing, show competition or racing;
The raising, breeding or training of game animals or game birds,
fish, cats, dogs or pets or animals intended for the use in sporting
or recreational activities;
Fur farming;
Stockyard and slaughterhouse operations; or
Manufacturing or processing operations of any kind.
Any trust, other than a business trust, intended as a will
substitute by the settlor which becomes effective during the lifetime
of the settlor, but from which trust distributions cannot be made
to any beneficiaries other than the settlor prior to the death of
the settlor.
Any individual, such individual's brothers and sisters, the
brothers and sisters of such individual's parents and grandparents,
the ancestors and lineal descendents of any of the foregoing, a spouse
of any of the foregoing and the estate of any of the foregoing. Individuals
related by the half blood or legal adoption shall be treated as if
they were related by the whole blood.
Any trust, other than a business trust or a living trust,
which takes effect during the lifetime of the settlor and for which
the trustees of the trust take title to property primarily for the
purpose of protecting, managing or conserving it until distribution
to the named beneficiaries of the trust. An ordinary trust does not
include a trust that has an objective to carry on business and divide
gains, nor does it either expressly or impliedly have any of the following
features: the treatment of beneficiaries as associates, the treatment
of interests in the trust as personal property, the free transferability
of beneficial interests in the trust, centralized management by the
trustee or the beneficiaries, or continuity of life.
Every natural person, association, or corporation. Whenever
used in any clause prescribing and imposing a fine or imprisonment,
or both, the term "person" as applied to associations, shall include
the responsible members or general partners thereof, and as applied
to corporations, the officers thereof.
Any lands, tenements or hereditaments within this commonwealth,
including, without limitation, buildings, structures, fixtures, mines,
minerals, oil, gas, quarries, spaces with or without upper lower boundaries,
trees and other improvements, immovables or interest which by custom,
usage or law pass with a conveyance of land, but excluding permanently
attached machinery and equipment in an industrial plant.
A condominium unit.
A tenant-stockholder's interest in a cooperative housing corporation,
trust or association under a proprietary lease or occupancy agreement.
A corporation or association which is primarily engaged in
the business of holding, selling or leasing real estate 90% or more
of the ownership interest in which is held by 35 or fewer persons
and which:
Derives 60% or more of its annual gross receipts from the ownership
or disposition of real estate; or
Holds real estate, the value of which comprises 90% or more
of the value of its entire tangible asset holdings exclusive of tangible
assets which are freely transferable and actively traded on an established
market.
Any interest in real estate which endures for a period of time,
the termination of which is not fixed or ascertained by a specific
number of years, including, without limitation, an estate in fee simple,
life estate or perpetual leasehold; or
Any interest in real estate enduring for a fixed period of years
but which, either by reason of the length of the term or the grant
of a right to extend the term by renewal or otherwise, consists of
a group of rights approximating those of an estate in fee simple,
life estate or perpetual leasehold, including without limitation,
a leasehold interest or possessory interest under a lease or occupancy
agreement for a term of 30 years or more or a leasehold interest or
possessory interest in real estate in which the lessee has equity.
The making, executing, delivering, accepting, or presenting
for recording of a document.
In the case of any bona fide sale of real estate at arm's length
or actual monetary worth, the amount of the actual consideration therefore,
paid or to be paid, including liens or other encumbrances thereon
existing before the transfer and nor removed thereby, whether or not
the underlying indebtedness is assumed, and ground rents or a commensurate
part thereof where such liens or other encumbrances and ground rents
also encumber or are charged against other real estate, provided that
where such documents shall set forth a nominal consideration, the
"value" thereof shall be determined from the price set forth in or
actual consideration for the contract of sale;
In the case of a gift, sale by execution upon a judgment or
upon the foreclosure of a mortgage by a judicial officer, transactions
without consideration or for consideration less than the actual monetary
worth of real estate, a taxable lease, an occupancy agreement, a leasehold
or possessory interest, any exchange of properties, or the real estate
of an acquired company, the actual monetary worth of real estate determined
by adjusting the assessed value of the real estate for local real
estate tax purposes for the common level ratio of assessed values
to market values of the taxing district as established by the State
Tax Equalization Board, or a commensurate part of the assessment where
the assessment includes other real estate;
The actual consideration for or actual monetary worth of any
executory agreement for the construction of buildings, structures
or other permanent improvements to real estate between the grantor
and other persons existing before the transfer and not removed thereby
or between the grantor, the agent or principal of the grant or a related
corporation, association or partnership and the grantee existing before
or effective with the transfer.
A.Â
Every person who makes, executes, delivers, accepts or presents for
recording any document or in whose behalf any document is made, executed,
delivered, accepted or presented for recording, shall be subject to
pay for and in respect to the transaction or any part thereof, or
for or in respect of the vellum parchment or paper upon which such
document is written or printed, a tax at the rate of 1/2% of the value
of the real estate represented by such document, which tax shall be
payable at the earlier of the time the document is presented for recording
or within 30 days of acceptance of such document or within 30 days
of becoming an acquired company, provided that, in computing the value
of the real estate on which the tax shall be paid, any fraction of
$100 shall be regarded as a full $100.
B.Â
The payment of the tax imposed herein shall be evidenced by the affixing
of an official stamp or writing by the Recorder of Deeds whereon the
date of the payment of the tax, amount of the tax and the signature
of the collecting agent shall be set forth.
C.Â
Any tax imposed that is not paid by the date the tax is due shall
bear interest as prescribed for interest on delinquent municipal claims
under the Act of May 16, 1923 (P.L. 207, No. 153) (53 P.S. § 7101
et seq.), as amended known as the "Municipal Claims and Tax Liens
Act." The interest rate shall be the lesser of the interest rate imposed
upon delinquent commonwealth taxes as provided in Section 806 of the
Act of April 9, 1929 (P.L. 343, No. 176) (72 P.S. § 806),
as amended, known as the "Fiscal Code," or the maximum interest rate
permitted under the Municipal Claims and Tax Liens Act for tax claims.
A.Â
The real estate transfer tax shall not be imposed upon:
(1)Â
A transfer to the commonwealth or to any of its instrumentalities,
agencies or political subdivisions by gift, dedication or deed in
lieu of condemnation or deed of confirmation in connection with condemnation
proceedings, or a reconveyance by the condemning body of the property
condemned to the owner of record at the time of condemnation, which
reconveyance may include property line adjustments provided said reconveyance
is made within one year from the date of condemnation.
(2)Â
A document which the commonwealth is prohibited from taxing under
the Constitution or statutes of the United States.
(3)Â
A conveyance to a municipality, township, school district or county
pursuant to acquisition by the municipality, township, school district
or county of a tax delinquent property at sheriff sale or tax claim
bureau sale.
(4)Â
A transfer for no or nominal actual consideration which corrects
or confirms a transfer previously recorded, but which does not extend
or limit existing record legal title or interest.
(5)Â
A transfer of division in kind for no or nominal actual consideration
of property passed by testate or intestate succession and held by
cotenants; however, if any of the parties take shares greater in value
than their undivided interest, tax is due on the excess.
(6)Â
A transfer between husband and wife, between persons who were previously
husband and wife who have since been divorced, provided the property
or interest therein subject to such transfer was acquired by the husband
and wife or husband or wife prior to the granting of the final decree
in divorce, between parent and child or the spouse of such child,
between brother or sister or spouse of a brother or sister and between
a grandparent and grandchild or the spouse of such grandchild, except
that a subsequent transfer by the grantee within one year shall be
subject to tax as if the grantor were making such transfer.
(7)Â
A transfer for no or nominal actual consideration of property passing
by testate or interest succession from a personal representative of
a decedent to the decedent's devisee or heir.
(8)Â
A transfer for no or nominal actual consideration from a trustee
of an ordinary trust where the transfer of the same property would
be exempt if the transfer was made directly from the grantor to all
of the possible beneficiaries that are entitled to receive the property
or proceeds from the sale of the property under the trust, whether
or not such beneficiaries are contingent or specifically named. A
trust clause which identifies the contingent beneficiaries by reference
to the heirs of the trust settlor as determined by the laws of the
intestate succession shall not disqualify a transfer from the exclusion
provided by this clause. No such exemption shall be granted unless
the Recorder of Deeds is presented with a copy of the trust instrument
that clearly identifies the grantor and all possible beneficiaries.
(9)Â
A transfer for no or nominal actual consideration to a trustee of
a living trust from the settlor of the living trust. No such exemption
shall be granted unless the Recorder of Deeds is presented with a
copy of the living trust instrument.
(10)Â
A transfer for no or nominal actual consideration from a trustee
of an ordinary trust to a specifically named beneficiary that is entitled
to receive the property under the recorded trust instrument or to
a contingent beneficiary where the transfer of the same property would
be exempt if the transfer was made by the grantor of the property
into the trust to that beneficiary. However, any transfer of real
estate from a living trust during the settlor's lifetime shall be
considered for the purposes of this article as if such transfer were
made directly from the settlor to the grantee.
(11)Â
A transfer for no or nominal actual consideration from a trustee
of a living trust after the death of the settlor of the trust or from
a trustee of a trust created pursuant to the will of a decedent to
a beneficiary to whom the property is devised or bequeathed.
(12)Â
A transfer for no or nominal actual consideration from the trustee
of a living trust to the settlor of the living trust if such property
was originally conveyed to the trustee by the settlor.
(13)Â
A transfer for no or nominal actual consideration from trustee
to successor trustee.
(14)Â
A transfer for no or nominal actual consideration between principal
and agent or straw party; or from or to an agent or straw party where,
if the agent or straw party were his principal, no tax would be imposed
under this article. Where the document by which title is acquired
by the grantee from, or for the benefit of, his principal, there is
a rebuttable presumption that the property is the property of the
grantee in his individual capacity if the grantee claims an exemption
from taxation under this clause.
(15)Â
A transfer made pursuant to the statutory merger or consolidation
of a corporation or statutory division of a nonprofit corporation,
except where the department reasonably determines that the primary
intent for such merger, consolidation or division is avoidance of
the tax imposed by this article.
(16)Â
A transfer from a corporation or association of real estate
held of record in the name of the corporation or association where
the grantee owns stock of the corporation or an interest in the association
in the same proportion as his interest in or ownership of the real
estate being conveyed and where the stock of the corporation or the
interest in the association has been held by the grantee for more
than two years.
(17)Â
A transfer from a nonprofit industrial development agency or
authority to a grantee of property conveyed by the grantee to that
agency or authority as security for a debt of the grantee or a transfer
to a nonprofit industrial development agency or authority.
(18)Â
A transfer from a nonprofit industrial development agency or
authority to a grantee purchasing directly from it, but only if:
(a)Â
The grantee shall directly use such real estate for the primary
purpose of manufacturing, fabricating, compounding, processing, publishing,
research and development, transportation, energy conversion; energy
production, pollution control, warehousing or agriculture; and
(b)Â
The agency or authority has the full ownership interest in real
estate transferred.
(19)Â
A transfer by a mortgagor to the holder of a bona fide mortgage
in default in lieu of a foreclosure or a transfer pursuant to a judicial
sale in which the successful bidder is the bona fide holder of a mortgage,
unless the holder assigns the bid to another person.
(20)Â
Any transfer between religious organizations or other bodies
or persons holding title for a religious organization if such real
estate is not being or has not been used by such transferor for commercial
purposes.
(21)Â
A transfer to a conservancy which possesses a tax-exempt status
pursuant to Section 501(c)(3) of the Internal Revenue Code of 1954
[68A Stat. 3, 26 U.S.C. § 501(c)(3)] and which has as its
primary purpose preservation of land for historic, recreational, scenic,
agricultural or open space opportunities; or a transfer from such
a conservancy to the United States, the commonwealth or to any of
their instrumentalities, agencies or political subdivisions; or any
transfer from such a conservancy where the real estate is encumbered
by a perpetual agricultural conservation easement as defined by the
act of June 30, 1981 (P.L. 128, No. 43), known as the "Agricultural
Area Security Law," and such conservancy has owned the real estate
for at least two years immediately prior to the transfer.
(22)Â
A transfer of real estate devoted to the business of agriculture
to a family farm corporation by a member of the same family which
directly owns at least 75% of each class of the stock thereof.
(23)Â
A transfer of real estate devoted to the business of agriculture
to a family farm partnership by a member of the same family, which
family directly owns at least 75% of the interests in the partnership.
(24)Â
A transfer between members of the same family of an ownership
interest in a real estate company, family farm corporation or family
farm partnership which owns real estate.
(25)Â
A transaction wherein the tax due is $1 or less.
(26)Â
Leases for the production or extraction of coal, oil, natural
gas or minerals and assignments thereof.
B.Â
In order to exercise any exclusion provided in this section, the
true, full and complete value of the transfer shall be shown on the
statement of value. For leases of coal, oil, natural gas or minerals,
the statement of value may be limited to an explanation of the reason
such document is not subject to the tax under this article.
Except as otherwise provided in § 418-31, documents which make, confirm or evidence any transfer or demise of title to real estate between associations or corporations and the members, partners, shareholders or stockholders thereof are fully taxable. For the purposes of this section, corporations and associations are entities separate from their members, partners, stockholders or shareholders.
A.Â
A real estate company is an acquired company upon a change in the
ownership interest in the company, however effected, if the change:
B.Â
With respect to real estate acquired after February 16, 1986, a family
farm corporation is an acquired company when, because of voluntary
or involuntary dissolution, it ceases to be a family farm corporation
or when, because of issuance of transfer of stock or because of acquisition
or transfer of assets that are devoted to the business of agriculture,
it fails to meet the minimum requirements of a family farm corporation
under this article.
C.Â
A family farm partnership is an acquired company when, because of
voluntary or involuntary dissolution, it ceases to be a family farm
partnership or when, because of transfer of partnership interests
or because of acquisition or transfer of assets that are devoted to
the business of agriculture, it fails to meet the minimum requirements
of a family farm partnership under this article.
D.Â
Within 30 days after becoming an acquired company, the company shall
present a declaration of acquisition with the recorder of each county
in which it holds real estate for the affixation of documentary stamps
and recording. Such declaration shall set forth the value of real
estate holdings of the acquired company in such county.
A.Â
Where there is a transfer of a residential property by a licensed
real estate broker which property was transferred to him within the
preceding year as consideration for the purchase of other residential
property, a credit for the amount of the tax paid at the time of the
transfer to him shall be given to him toward the amount of the tax
due upon the transfer.
B.Â
Where there is a transfer by a builder of residential property which
was transferred to the builder within the preceding year as consideration
for the purchase of new, previously unoccupied residential property,
a credit for the amount of the tax paid at the time of the transfer
to the builder shall be given to the builder toward the amount of
tax due upon the transfer.
C.Â
Where there is a transfer of real estate which is devised by the
grantor, a credit for the amount of tax paid at the time of the devise
shall be given the grantor toward the tax due upon the transfer.
D.Â
Where there is a conveyance by deed of real estate which was previously
sold under a land contract by the grantor, a credit for the amount
of tax paid at the time of the sale shall be given to the grantor
toward the tax due upon the deed.
E.Â
If the tax due upon the transfer is greater that the credits given
under this section, the difference shall be paid. If the credit allowed
is greater than the amount of tax due, no refund or carryover credit
shall be allowed.
In determining the term of a lease, it shall be presumed that
a right or option to renew or extend a lease will be exercised if
the rental charge to the lessee is fixed or if a method for calculating
a rental charge is established.
The tax herein imposed shall be fully paid, and have priority
out of the proceeds of any judicial sale of real estate before any
other obligation, claim, lien, judgment, estate or costs of the sale
and of the writ upon which the sale is made, and the sheriff, or other
officer, conducting said sale, shall pay the tax herein imposed out
of the first moneys paid to him in connection therewith. If the proceeds
of the sale are insufficient to pay the entire tax herein imposed,
the purchaser shall be liable for the remaining tax.
The tax imposed under § 418-30 and all applicable interest and penalties shall be administered, collected and enforced under the Act of December 31, 1965 (P.L. 1257 No. 511 as amended, known as the "Local Tax Enabling Act," provided that if the correct amount of the tax is not paid by the last date prescribed for timely payment, the Borough, pursuant to Section 1102(D) of the Tax Reform Code of 1971 (72 P.S. § 8102-D), authorizes and directs the Department of Revenue of the Commonwealth of Pennsylvania to determine, collect and enforce the tax, interest and penalties.
Every document lodged with or presented to the Recorder of Deeds
for recording shall set forth therein and as part of such document
the true, full and complete value thereof, or shall be accompanied
by a statement of value executed by a responsible person connected
with the transaction showing such connection and setting forth the
true, full and complete value thereof or the reason, if any, why such
document is not subject to tax under this article. The provisions
of this section shall not apply to any excludable real estate transfers
which are exempt form taxation based on family relationship. Other
documents presented for the affixation of stamps shall be accompanied
by a certified copy of the document and statement of value executed
by a responsible person connected with the transaction showing such
connection and setting forth the true, full and complete value thereof
or the reason, if any, why such document is not subject to tax under
this article.
A.Â
Civil penalties.
(1)Â
If any part of any underpayment of taxes imposed by this article
is due to fraud, there shall be added to the tax an amount equal to
50% of the underpayment.
(2)Â
In the case of failure to record a declaration required under this
article on the date prescribed therefor, unless it is shown that such
failure is due to reasonable cause, there shall be added to the tax
5% of the amount of such tax if the failure is for not more than one
month, with an additional 5% for each additional month or fraction
thereof during which such failure continues, not exceeding 50% in
the aggregate.
B.Â
Fines. Any person who violates any provision of this article shall,
for every such violation, upon conviction, shall be sentenced to pay
a fine of not more than $600 and costs of prosecution and, in default
of payment of fines and costs, to undergo imprisonment for not more
than 30 days. Each day that a violation continues shall be a separate
offense.
The tax imposed by this article shall become a lien upon the
lands, tenements or hereditaments, or any interest therein, lying,
being situated, wholly or in part within the boundaries of the Borough
of Montgomery, which lands, tenements, hereditaments or interest therein
are described in or conveyed by or transferred by the deed which is
the subject of the tax imposed, assessed and levied by this article,
said lien to begin at the time when the tax under this article is
due and payable, and continue until discharged by payment, or in accordance
with the law, and the solicitor is authorized to file a municipal
or tax claim in the Court of Common Pleas of Lycoming County, in accordance
with the provisions of the Municipal Claims and Liens Act of 1923,
53 P.S. § 7101 et seq., its supplements and amendments.
All taxes imposed by this article, together with interest and
penalties prescribed herein, shall be recoverable as other debts of
like character are recovered.